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Everyone needs insurance to protect their most valuable assets, and there’s nothing more valuable than your life for you and your family. While it may be unpleasant to think about what happens after you’re gone, it’s important that you provide financial security to your dependents in case the unthinkable should occur. Purchasing a life insurance policy is the best way you can ensure your family is provided for, so they can handle final expenses, mortgages, paying for education, and more.
Finding the right insurance company and life insurance plan can be an intimidating task, especially if you haven’t thought much about it before. Still, it’s best to get it taken care of as soon as possible because it’s easier to get a greater amount of coverage for a lower premium when you’re in good health and still young.
In addition to typical application questions, such as whether you use tobacco or alcohol, some insurance companies may also require you to take a medical exam before classifying you for coverage. You may also be surprised by the types of insurance and different pros and cons they offer. Here are just a few crucial tips for your policy hunt before you make any commitments.
Here are few life insurance tips
Get a true picture of your finances
Before you can seriously think about the type of policy you need or the coverage amount you may need, you need to look at your financial situation as clearly as possible. Naturally, your annual income is going to have a huge impact on all this, but you’ll also need to assess your savings accounts, any retirement accounts, investments, and anything else you and your family members may need to rely on.
When you consider this alongside how many beneficiaries you’ll need to name for your death benefit, you may realize that you aren’t as prepared as you thought for unexpected events. If this is the case, you’ll need a large coverage amount, at least until you can get your finances more under control. It’s a great idea to speak with a financial advisor as you begin this journey.
Difference between term and permanent life insurance policy
Once you understand the coverage amount you’ll need and understand the factors that can affect your life insurance premium, you’ll need to decide between a term insurance policy or a permanent life policy. As the name suggests, term insurance guarantees a death benefit to your beneficiaries during a specified amount of time.
If the policy lapses, and you die outside of the term, then your dependents will get nothing. This is why it’s crucial to immediately renew the term when it’s up or convert the term insurance to a permanent policy.
Permanent insurance coverage protects you for the rest of your life, though this is often at the expense of higher premiums compared to a term life policy. Permanent life insurance offers additional advantages, though, such as the ability to accrue cash value via dividends, which can ultimately pay for the premiums or purchase additional coverage.
You could also opt for a variable insurance plan, which allows you to invest dividends and advance premiums in subaccounts that serve similar roles as mutual funds.
Shop extensively for the best rates
There are a mind-boggling number of options for insurance policies, and it can be daunting to figure out which insurance companies to go with. Fortunately, with a convenient way to check life insurance policy quotes online, you can learn more about companies, which plans suit you and get free quotes, all in one place. You’ll just need some basic personal information, medical history, family information, and coverage history to get started.